A former employee of the Las Vegas Valley Water District pleaded guilty Tuesday to mail fraud and tax evasion in a scheme to steal and sell more than $6.7 million worth of ink and toner cartridges from the public utility.
Jennifer J. McCain-Bray, 43, of Las Vegas, pleaded guilty before U.S. District Judge Kent Dawson to one count of mail fraud and one count of filing a false tax return, according to a news release from U.S. Attorney Dayle Elieson’s office.
Sentencing was set for Jan. 29.
The maximum penalty for mail fraud is 20 years in prison and a $250,000 fine, and the maximum penalty for filing a false tax return is three years in prison and a $250,000 fine. McCain-Bray also faces a $6,715,531 criminal forfeiture money judgment, the release said.
As part of her written plea agreement, McCain-Bray admitted that between January 2007 and December 2015 she spent district funds on ink and toner cartridges and then sent them to a buyer in New Jersey in exchange for “money and other things of value.”
Financial records indicate that she used the fraud proceeds for personal expenses and purchases, including extensive home remodeling and improvements, trips, gifts to family members and friends and other lifestyle expenses.
$2.3 million went undeclared
Between 2011 and 2015, she made more than $2.3 million that she never declared as income on her tax returns, court documents show.
McCain-Bray was hired by the water district as an office assistant in the engineering department in 2001 and joined the purchasing department as an assistant in 2004. A well-liked employee known around the office as J.J., she was promoted to purchasing analyst in October 2007, a job that paid $97,880 a year and involved dealing with vendors and buying supplies and materials for the valley’s largest water utility.
According to district officials, McCain-Bray fraudulently bought and sold “easily” tens of thousands of ink and toner cartridges, using the utility’s mailing system to ship boxes of them to an apparently fake New Jersey company called Symm Distributors Inc.
The operation began to unravel in December 2015, after a co-worker reported suspicious activity and the district recovered a box of toner addressed to Symm Distributors but destined for a residence in Carteret, New Jersey.
“Throughout this process, we have cooperated with the FBI, providing full and complete access to all information in our possession,” water district spokesman Bronson Mack said in an email Tuesday. “The district has pursued and continues to pursue every avenue available to recover all assets that were lost as a result of the fraudulent purchases.”
District officials have said they were in the process of firing McCain-Bray when she resigned on Dec. 16, 2015, 13 days after they say she admitted to “fraudulent purchases that resulted in personal gain.”
Three other workers disciplined
The district’s purchasing manager, accounting supervisor and one of its finance analysts were placed on paid leave for failing to notice the scheme. They all left the public agency in early 2016 before they could be fired.
District officials have declined to identify the three but said there was no evidence linking them — or any other current or former district employees — to the fraud.
Since then, Mack said the district has made “significant changes in its office supply purchasing processes that are designed to prevent any reoccurrence of such fraudulent activity.”
They include increased reporting and documentation, new rules requiring a supervisor’s approval for all office supply purchases and the use of a central warehouse where all shipments must be sent for verification and distribution.
When news of the crime broke in the spring of 2016, McCain-Bray was working in the purchasing department at UNLV, but she left the university soon after.
At the time, university officials declined to say whether she quit or was fired.
No one else has been charged in connection with the case.
According to the release from federal prosecutors, the case is still being investigated by the FBI and the IRS.